Anti-Dumping

Antidumping law and practice- USA and China.

Among the trilogy of trade remedy regimes- countervailing duty, safeguard and antidumping actions- antidumping actions are by far the remedy of choice. It’s a measure internationally adopted to stop unfair competition, regulate international market order and protect the security of the national industries. It’s adopted by an increasing number of countries as it’s playing an increasingly important role in international trade. It’s perhaps the most controversial subject involving foreign trade. The United States is the world’s biggest user of antidumping and has been for decades. China, on the other hand, has been the number-one target of antidumping by most countries for the past decade. The first dumping lawsuit against china came in 1979 when Europeans accused Chinese saccharin manufacturers of dumping.

If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. The WTO agreement does not pass judgment. Its focus is on how governments can or cannot react to dumping- it disciplines antidumping actions, and it is often called the “Antidumping Agreement” (The Agreement on Implementation of article VI of the General Agreement on Tariffs and Trade 1994). Antidumping refers to a legal system under which the government of a country investigates the dumping of imports and take corresponding antidumping measures in accordance with the law.

Broadly speaking, the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping and show that the dumping is causing injury or threatening to do so. Typically, antidumping action means charging extra import duty on the particular product from the particular exporting country in order to “bring” its price closer to the “normal value” or to remove the injury to domestic industry in the importing country. There are many different ways of calculating whether a particular product is being dumped. The agreement (AD Agreement) narrows down the range of possible options to three methods. The main one is based on the price in the exporter’s domestic market. When this cannot be used, two alternatives are availa...

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...s and harming for an average American consumer.

Antidumping is a widely used remedy in international trade. Some countries use it more commonly than others. Some initiate a lot of antidumping cases, other are targets of these initiations. There are as many defenders as opponents nation and worldwide. Antidumping actions are to some extent very subjective and it makes it, among other arguments, a very controversial tool. Some even find it a threat to the international trade and prove that it is against free trade. Antidumping involves too many emotions and political influence. In many cases it’s a very short-term remedy for a difficult situation. However, it makes life more difficult for those thinking about predatory entrance and unfair competition. Both are against market order and fair competition with equal opportunities for everybody. It’s unethical and harmful to win a market with forbidden actions. Antidumping will still arouse emotions and protests: as long as there will be countries which antidumping institutions are under political pressure to protect particular sectors/industries and as long as there will countries willing to win foreign markets no matter what price.